“We delivered a solid performance in Q3 which included another quarter of record revenue and our highest level of profitability in recent years. North America was strong as we supported the strategic initiatives of our customers in areas such as digital transformation, Pay TV, network virtualization, and the enterprise segment. In Europe and Rest of World, we remained focused on our execution as we continued to progress several high-end projects towards production on behalf of some of the world’s largest service providers,” said Eli Gelman, president and chief executive officer of Amdocs Management Limited.

Gelman continued, “Our sales momentum was also strong in Q3 as we sustained a high win rate that included some important contract renewals, as well as several key awards in highly strategic areas. Among the highlights, I am pleased to report that we secured a significant enterprise B2B award with a new customer in the North American Pay TV market, and a definitive agreement with Australia’s Telstra to deploy an order orchestration and fulfillment solution that will help to transform the experience of their consumer and business customers.”

Gelman concluded, “We are encouraged by our strong sales momentum in the last several quarters which we believe indicates our ability to predict and invest in the future requirements of service providers, often many quarters in advance of their needs. Of course, we are closely monitoring the many moving parts affecting our near term outlook but with our year-to-date financial performance and the visibility of our record 12-month backlog we enter Q4 on track to deliver expected total returns to our shareholders in the mid-to-high single digits in fiscal 2017.”

Revenue

Revenue for the third fiscal quarter ended June 30, 2017 was $966.7 million, up 0.1% or $0.7 million sequentially from the second fiscal quarter of 2017 and up 3.9% as compared to last year’s third fiscal quarter. Revenue for the third fiscal quarter of 2017 includes a small positive impact from foreign currency movements of approximately $3 million relative to the second quarter of fiscal 2017. Revenue was at the midpoint of Amdocs’ guidance, excluding foreign currency movements.

Net Income and Earnings Per Share

The Company's GAAP net income for the third quarter of fiscal 2017 was $119.3 million, or $0.81 per diluted share, compared to GAAP net income of $105.1 million, or $0.70 per diluted share, in the prior fiscal year’s third quarter. Net income on a non-GAAP basis was $150.4 million, or $1.02 per diluted share, compared to non-GAAP net income of $135.6 million, or $0.90 per diluted share, in the third quarter of fiscal 2016.

Returning Cash to Shareholders

Quarterly Cash Dividend Program: On August 2, 2017, the Board approved the Company’s next quarterly cash dividend payment of $0.22 per share and set September 29, 2017 as the record date for determining the shareholders entitled to receive the dividend, which will be payable on October 20, 2017.

Share Repurchase Activity: Repurchased $90 million of ordinary shares during the third quarter of fiscal 2017.

Twelve-month BacklogTwelve-month backlog, which includes anticipated revenue related to contracts, estimated revenue from managed services contracts, letters of intent, maintenance and estimated on-going support activities, was $3.22 billion at the end of the third quarter of fiscal 2017, up $10 million from the end of the prior quarter.

Fourth Quarter fiscal 2017 Outlook

Revenue of approximately $955-$995 million, including an immaterial sequential impact from foreign currency fluctuations as compared to the third quarter of fiscal 2017

Diluted GAAP EPS of approximately $0.68-$0.76

Diluted non-GAAP EPS of approximately $0.91-$0.97, excluding amortization of purchased intangible assets and other acquisition-related costs and approximately $0.06-$0.07 per share of equity-based compensation expense, net of related tax effects. This range reflects a non-GAAP effective tax rate in the fourth fiscal quarter above our annual target range of 13% to 17%

Our fourth fiscal quarter 2017 and full year fiscal 2017 outlook takes into consideration the company’s expectations regarding macro and industry specific risks and various uncertainties and certain assumptions that we will discuss on our earnings conference call. However, Amdocs notes market dynamics continue to shift rapidly and that it cannot predict all possible outcomes, including those resulting from AT&T’s proposed merger with Time Warner, the reported strategic discussions between Comcast, Charter and Sprint, or from other current and potential customer consolidation activity in North America.

Conference Call Details Amdocs will host a conference call on August 2, 2017 at 5:00 p.m. Eastern Time to discuss the Company's third quarter of fiscal 2017 results. To participate, please dial +1 (844) 513-7152, or +1 (508) 637-5600 outside the United States, approximately 15 minutes before the call and enter passcode 43007164. The call will also be carried live on the Internet via the Amdocs website, www.amdocs.com.

amortization of purchased intangible assets and other acquisition-related costs;

changes in fair value of certain acquisition-related liabilities;

equity-based compensation expense; and

tax effects related to the above.

These non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. Amdocs believes that non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with Amdocs’ results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Amdocs’ results of operations in conjunction with the corresponding GAAP measures.

Amdocs believes that the presentation of non-GAAP diluted earnings per share and other financial measures, including free cash flow, non-GAAP cost of revenue, non-GAAP research and development, non-GAAP selling, general and administrative, non-GAAP operating income, non-GAAP operating margin, non-GAAP income taxes, non-GAAP effective tax rate, non-GAAP net income and non-GAAP diluted earnings per share growth when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and results of operations, as well as the net amount of cash generated by its business operations after taking into account capital spending required to maintain or expand the business.

For its internal budgeting process and in monitoring the results of the business, Amdocs’ management uses financial statements that do not include amortization of purchased intangible assets and other acquisition-related costs, changes in fair value of certain acquisition-related liabilities, equity-based compensation expense and related tax effects. Amdocs’ management also uses the foregoing non-GAAP financial measures, in addition to the corresponding GAAP measures, in reviewing the financial results of Amdocs. In addition, Amdocs believes that significant groups of investors exclude these items in reviewing its results and those of its competitors, because the amounts of the items between companies can vary greatly depending on the assumptions used by an individual company in determining the amounts of the items.

Amdocs further believes that, where the adjustments used in calculating non-GAAP diluted earnings per share are based on specific, identified amounts that impact different line items in the Consolidated Statements of Income (including cost of revenue, research and development, selling, general and administrative, operating income, income taxes and net income), it is useful to investors to understand how these specific line items in the Consolidated Statements of Income are affected by these adjustments. Please refer to the Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP tables below.

About AmdocsAmdocs is a leading software and services provider to the world’s most successful communications and media companies. As our customers reinvent themselves, we enable their digital and network transformation through innovative solutions, delivery expertise and intelligent operations. Amdocs and its 25,000 employees serve customers in over 85 countries. Listed on the NASDAQ Global Select Market, Amdocs had revenue of $3.7 billion in fiscal 2016.

This press release includes information that constitutes forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995, including statements about Amdocs’ growth and business results in future quarters. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be obtained or that any deviations will not be material. Such statements involve risks and uncertainties that may cause future results to differ from those anticipated. These risks include, but are not limited to, the effects of general economic conditions, Amdocs’ ability to grow in the business markets that it serves, Amdocs’ ability to successfully integrate acquired businesses, adverse effects of market competition, rapid technological shifts that may render the company's products and services obsolete, potential loss of a major customer, our ability to develop long-term relationships with our customers, and risks associated with operating businesses in the international market. Amdocs may elect to update these forward-looking statements at some point in the future; however, Amdocs specifically disclaims any obligation to do so. These and other risks are discussed at greater length in Amdocs’ filings with the Securities and Exchange Commission, including in our Annual Report on Form 20-F for the fiscal year ended September 30, 2016 filed on December 12, 2016 and our Form 6-K furnished for the first quarter of fiscal 2017 on February 13, 2017 and for the second quarter of fiscal 2017 on May 22, 2017.

AMDOCS LIMITED

Consolidated Statements of Income

(In thousands, except per share data)

Three months ended

Nine months ended

June 30,

June 30,

2017

2016

2017

2016

Revenue

$

966,695

$

930,133

$

2,887,431

$

2,777,573

Operating expenses:

Cost of revenue

628,640

601,249

1,871,211

1,796,933

Research and development

67,118

65,051

194,411

191,249

Selling, general and administrative

113,997

113,831

352,541

347,853

Amortization of purchased intangible assets and other

27,028

25,040

83,982

76,894

836,783

805,171

2,502,145

2,412,929

Operating income

129,912

124,962

385,286

364,644

Interest and other income (expense), net

1,152

1,113

(2,079

)

908

Income before income taxes

131,064

126,075

383,207

365,552

Income taxes

11,800

21,015

53,590

51,930

Net income

$

119,264

$

105,060

$

329,617

$

313,622

Basic earnings per share

$

0.82

$

0.71

$

2.25

$

2.09

Diluted earnings per share

$

0.81

$

0.70

$

2.23

$

2.06

Basic weighted average number of shares outstanding

145,904

148,844

146,439

149,802

Diluted weighted average number of shares outstanding

147,259

150,726

147,865

151,912

Cash dividends declared per share

$

0.220

$

0.195

$

0.635

$

0.560

AMDOCS LIMITED

Selected Financial Metrics

(in thousands, except per share data)

Three months ended

Nine months ended

June 30,

June 30,

2017

2016

2017

2016

Revenue

$

966,695

$

930,133

$

2,887,431

$

2,777,573

Non-GAAP operating income

167,193

159,814

497,275

474,636

Non-GAAP net income

150,440

135,571

423,171

407,756

Non-GAAP diluted earnings per share

$

1.02

$

0.90

$

2.86

$

2.68

Diluted weighted average number of shares outstanding

147,259

150,726

147,865

151,912

AMDOCS LIMITED

Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP

(in thousands)

Three months endedJune 30, 2017

Reconciliation items

GAAP

Amortization of purchased intangible assets and other

Equity based compensation expense

Tax effect

Non-GAAP

Operating expenses:

Cost of revenue

$

628,640

$

-

$

(4,763

)

$

-

$

623,877

Research and development

67,118

-

(914

)

-

66,204

Selling, general and administrative

113,997

-

(4,576

)

-

109,421

Amortization of purchased intangible assets and other

27,028

(27,028

)

-

-

-

Total operating expenses

836,783

(27,028

)

(10,253

)

-

799,502

Operating income

129,912

27,028

10,253

-

167,193

Income taxes

11,800

-

-

6,105

17,905

Net income

$

119,264

$

27,028

$

10,253

$

(6,105

)

$

150,440

Three months endedJune 30, 2016

Reconciliation items

GAAP

Amortization of purchased intangible assets and other

Equity based compensation expense

Tax effect

Non-GAAP

Operating expenses:

Cost of revenue

$

601,249

$

-

$

(4,406

)

$

-

$

596,843

Research and development

65,051

-

(953

)

-

64,098

Selling, general and administrative

113,831

-

(4,453

)

-

109,378

Amortization of purchased intangible assets and other

25,040

(25,040

)

-

-

-

Total operating expenses

805,171

(25,040

)

(9,812

)

-

770,319

Operating income

124,962

25,040

9,812

-

159,814

Income taxes

21,015

-

-

4,341

25,356

Net income

$

105,060

$

25,040

$

9,812

$

(4,341

)

$

135,571

AMDOCS LIMITED

Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP

(in thousands)

Nine months endedJune 30, 2017

Reconciliation items

GAAP

Amortization of purchased intangible assets and other

Equity based compensation expense

Changes in fair value of certain acquisition- related liabilities

Tax effect

Non-GAAP

Operating expenses:

Cost of revenue

$

1,871,211

$

-

$

(14,734

)

$

6,691

$

-

$

1,863,168

Research and development

194,411

-

(2,714

)

-

-

191,697

Selling, general and administrative

352,541

-

(17,250

)

-

-

335,291

Amortization of purchased intangible assets and other

83,982

(83,982

)

-

-

-

-

Total operating expenses

2,502,145

(83,982

)

(34,698

)

6,691

-

2,390,156

Operating income

385,286

83,982

34,698

(6,691

)

-

497,275

Income taxes

53,590

-

-

-

18,435

72,025

Net income

$

329,617

$

83,982

$

34,698

$

(6,691

)

$

(18,435

)

$

423,171

Nine months endedJune 30, 2016

Reconciliation items

GAAP

Amortization of purchased intangible assets and other

Equity based compensation expense

Tax effect

Non-GAAP

Operating expenses:

Cost of revenue

$

1,796,933

$

-

$

(13,447

)

$

-

$

1,783,486

Research and development

191,249

-

(2,813

)

-

188,436

Selling, general and administrative

347,853

-

(16,838

)

-

331,015

Amortization of purchased intangible assets and other

76,894

(76,894

)

-

-

-

Total operating expenses

2,412,929

(76,894

)

(33,098

)

-

2,302,937

Operating income

364,644

76,894

33,098

-

474,636

Income taxes

51,930

-

-

15,858

67,788

Net income

$

313,622

$

76,894

$

33,098

$

(15,858

)

$

407,756

AMDOCS LIMITED

Condensed Consolidated Balance Sheets

(in thousands)

As of

June 30, 2017

September 30, 2016

ASSETS

Current assets

Cash, cash equivalents and short-term interest-bearing investments

$

963,039

$

1,095,723

Accounts receivable, net, including unbilled of $174,898 and $134,122, respectively

893,386

818,531

Prepaid expenses and other current assets

228,611

186,137

Total current assets

2,085,036

2,100,391

Equipment and leasehold improvements, net

336,791

331,728

Goodwill and other intangible assets, net

2,395,253

2,493,166

Other noncurrent assets

476,537

406,070

Total assets

$

5,293,617

$

5,331,355

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities

Accounts payable, accruals and other

$

1,053,303

$

992,679

Short-term financing arrangements

-

200,000

Deferred revenue

123,866

173,331

Total current liabilities

1,177,169

1,366,010

Other noncurrent liabilities

534,759

511,784

Shareholders’ equity

3,581,689

3,453,561

Total liabilities and shareholders’ equity

$

5,293,617

$

5,331,355

AMDOCS LIMITED

Consolidated Statements of Cash Flows

(in thousands)

Nine months ended June 30,

2017

2016

Cash Flow from Operating Activities:

Net income

$

329,617

$

313,622

Reconciliation of net income to net cash provided by operating activities: